SMBs to Boost Social Media and E-mail Spending in 2011

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More than half of small and medium sized businesses that intend to spend on digital advertising and marketing in 2011 expect to increase that spending compared to last year. That's according to the just-released 2011 Outlook report from Borrell Associates.

The research firm surveyed over 2,800 SMB owners to find that, of the 84 percent who will spend on digital, 53 percent will boost that portion of their budgets. Spending on their websites, social media marketing, and e-mail is set to grow more than 30 percent. Meanwhile, local print media, newspapers, directories and radio will take double-digit hits in 2011 among those who buy those formats.

The SMB market is huge according to Borrell, accounting for over 70 percent of all online advertising expenditures including e-mail, search, and run-of-site display last year. While individual SMBs on average spent less than $12,000 on all advertising in 2010 – about $2,300 of which went online – they represent 95 percent of U.S. business locations, according to the research company.

"SMB has become both buzz word and mantra to advertising execs of every stripe," notes the report. "As a result, SMBs have been bombarded with sales pitches... [fielding] 22 media sales calls per month."

Social media is especially hot. Small businesses are ever more interested in Facebook , Twitter, location-based services, and daily deals platforms that connect their virtual and real-world presences and facilitate word-of-mouth. According to the research firm, 70 percent of SMBs currently spend on social media, and in some cases, social network pages have replaced company sites. Borrell found more than a third of the 14 percent of SMBs without a company site have a social network page.

At Borrell's local media conference in New York City last week, Emily White, Facebook's director of local, pushed new offerings as valuable for SMBs, including the company's Facebook Places mobile check-in platform. She also touted its Sponsored Stories ad format which includes comments about a company by a user's friend in ads for that company, and described the offering as "social endorsements at scale."